Correlation Between Din Capital and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Din Capital and Bao Ngoc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Din Capital and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Bao Ngoc Investment, you can compare the effects of market volatilities on Din Capital and Bao Ngoc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Din Capital with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Bao Ngoc.
Diversification Opportunities for Din Capital and Bao Ngoc
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Din and Bao is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and Din Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Din Capital Investment are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Din Capital i.e., Din Capital and Bao Ngoc go up and down completely randomly.
Pair Corralation between Din Capital and Bao Ngoc
Assuming the 90 days trading horizon Din Capital Investment is expected to generate 0.82 times more return on investment than Bao Ngoc. However, Din Capital Investment is 1.22 times less risky than Bao Ngoc. It trades about 0.04 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about 0.02 per unit of risk. If you would invest 933,333 in Din Capital Investment on September 2, 2024 and sell it today you would earn a total of 86,667 from holding Din Capital Investment or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.28% |
| Values | Daily Returns |
Din Capital Investment vs. Bao Ngoc Investment
Performance |
| Timeline |
| Din Capital Investment |
| Bao Ngoc Investment |
Din Capital and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Bao Ngoc
The main advantage of trading using opposite Din Capital and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital position performs unexpectedly, Bao Ngoc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Din Capital vs. FIT INVEST JSC | Din Capital vs. Damsan JSC | Din Capital vs. An Phat Plastic | Din Capital vs. Alphanam ME |
| Bao Ngoc vs. Innovative Technology Development | Bao Ngoc vs. Saigon Viendong Technology | Bao Ngoc vs. Petrovietnam Drilling Mud | Bao Ngoc vs. Construction And Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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